Author Topic: Perils of Church-Related Pensions  (Read 10241 times)

ptmccain

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Re: Perils of Church-Related Pensions
« Reply #45 on: July 29, 2010, 03:56:44 PM »
If the ELCA is found to be responsible for the AF pension funds, I am not sure what this means for the fiscal health of the ELCA pension funds.

Michael_Rothaar

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Re: Perils of Church-Related Pensions
« Reply #46 on: July 29, 2010, 04:06:40 PM »
How safe are ELCA pensions?

There are no "pensions." There is a 403b plan, in which accumulations may -- in the past -- have been annuitized. Updates on the situation -- which led to a projected 24% reduction in benefits to retirees -- are posted at https://www.elcabop.org/en/UnderstandMyBenefits/Retirement/Annuity-briefings.aspx.

This is from a June 2010 letter from Board of Pensions president John Kapanke to annuitants:

I am pleased to report that the plan to return the Fund to fully funded status remains on track, despite the increased market volatility we have witnessed over these past few weeks. The Fundís funded ratio, which measures the Fundís assets divided by the benefit obligation, has improved from 0.67 as of December 31, 2008, to 0.83 as of May 31, 2010. While the funded ratio is actually slightly down from earlier this year, it is an improvement nonetheless. We attribute the overall improvement to the Fundís investment returns, annuity reduction and the interest-crediting rate for 2010 ó giving us some cause for hope that we may be able to potentially lessen the remaining two years of anticipated annuity reductions. As you know, the very reason we made the difficult decision to reduce annuity payments and allow markets time to recover is to help meet our priority goal of providing income to you for your lifetime.
[snip]
Looking ahead to 2011, I can understand that you may want to know what your annuity payments will be as soon as possible. Our board of trustees is expected to approve annuity adjustments for 2011 when it meets in early November. After the board of trustees meeting, we will notify you promptly of annuity adjustments for 2011. Annuity payments depend on the Fundís investment returns, which are difficult, if not impossible to predict.
While there has been some recovery in the markets and improvement to the Fundís funded ratio, keep in mind that a funding gap of nearly $400 million remains and the financial markets continue to be quite volatile. If the Fundís investment returns are higher than the projected rate of 7.6%, we will re-evaluate the funded ratio and could potentially lessen the remaining two years of anticipated annuity payment reductions. Conversely, if investment returns are less than the Fundís projected rate of 7.6%, the Board of Pensions will evaluate what additional measures may be necessary to reach our goal of closing the funding gap by the end of 2012. (The 7.6% projected return is based on the Fundís asset mix over the long term; itís unlikely in any given year that investment returns will be exactly 7.6%.)


Mike Rothaar
Retired from roster of active ELCA pastors 01 Jul 2012.
Mind and Spirit still working.

Charles_Austin

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Re: Perils of Church-Related Pensions
« Reply #47 on: July 30, 2010, 02:03:04 AM »
Pastor McCain writes:
If the ELCA is found to be responsible for the AF pension funds, I am not sure what this means for the fiscal health of the ELCA pension funds.

I respond:
Of course Pastor McCain isn't sure, for until a few minutes ago, he probably never gave 23 seconds thought to the ELCA pension funds. But when an opportunity to post yet another slam and fear-mongering message....he seizes it like a pit bull. And for what point?
"Watch out, ELCAers! Your pension funds may be in danger! And it's all because of......" (probably the decision to ordain women, but fill in your own blanks.)

The ELCA Board of Pensions (and I have been critical of them in the past) has done a good job of keeping us informed. That Pastor McCain is not informed doesn't bother me a bit.

SmithL

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Re: Perils of Church-Related Pensions
« Reply #48 on: July 30, 2010, 10:50:50 AM »
I posted my question about ELCA pensions because a friend of mine, an ELCA pastor, posted a note on Facebook asking if anyone else got bad news from the BOP.

LutherMan

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Retirees take on Lutheran-affiliated publisher Augsburg Fortress
« Reply #49 on: August 08, 2010, 02:54:19 PM »
http://www.twincities.com/business/ci_15697272?nclick_check=1

By John Welbes
jwelbes@pioneerpress.com
Updated: 08/07/2010 10:49:46 PM CDT

Judy Olsen remembers getting hired at Augsburg Publishing House in 1983, and how the pension plan was part of the package.

'It was part of the orientation,' she said. Employees saw the defined-benefit pension plan, providing a monthly payout for life for retirees, as a trade-off for what they called the lower-than-average wages they earned from the publisher of religious material.

Olsen, now 73, says she never had reason to doubt her pension, which provides about $600 per month.

'Then, at the end of last December, like 'Happy New Year,' we got the letter,' she said.

The letter came on Dec. 31, from Beth Lewis, president and CEO of what is now called Augsburg Fortress, Publishers, announcing the termination of the pension plan at the Minneapolis-based company.

For the 500 people who were part of the plan, its demise was a shock. By April, four of the affected participants filed a civil lawsuit against Augsburg Fortress, Lewis, other executives and the Evangelical Lutheran Church in America. The suit is seeking class action status.

Augsburg Fortress is the publishing house for the ELCA. The lawsuit challenges whether Augsburg Fortress' defunct pension is actually a "church" plan, the type that doesn't operate under the same federal laws as most other company plans. The next court action is set for October, a hearing on the ELCA's motion to dismiss the suit.

The demise of the Augsburg Fortress pension is adding fuel to the idea that such "church"
Advertisement
 
pension plans are in need of regulatory reform.

"We've been lobbying the IRS and Congress to do something about this," said Nancy Hwa, a spokeswoman for the Pension Rights Center, a nonprofit consumer organization based in Washington, D.C.

Beyond the legal dispute, the situation has also divided some synods of the ELCA as they've taken up resolutions on whether the church should help remedy the problem at Augsburg Fortress.

The plan's demise has pulled together frustrated pensioners who see their security disappearing. Dozens have shown up for meetings with the attorneys leading the legal case. There's also a Facebook page with 124 members ó titled "Augsburg Fortress Pension ó Speak Up!" ó where plan participants share information and question how this happened.

Titles of discussion threads, where many employees have posted comments, include "Hit by a truck," "Where is the integrity?" and "Write the Board Now!"
<snip>

Much more at the link.
http://www.twincities.com/business/ci_15697272?nclick_check=1

G.Edward

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Re: Perils of Church-Related Pensions
« Reply #50 on: October 31, 2010, 10:45:12 PM »
Quote
Welcome to Augsburg Fortress, the Publishing House of the Evangelical Lutheran Church in America. As the ministry of publishing for the ELCA, we are dedicated to serving you with top quality Christian materials that communicate the Gospel, enhance faith, and enrich the life of the Church and the communities it serves. In turn, each purchase you make from us helps us to support your ministry. Unlike other publishers and church supply companies, Augsburg Fortress reinvests all profits made into the development of new quality ministry resources for the church. The result ó a virtuous circle that encompasses both the needs of your church and the ability for Augsburg Fortress to provide you with resources to meet those needs

From Augsburg's own website.  They sound pretty well integrated with the ELCA to me.  How about a virtuous circle for employees and retireies counting on pension promises that were made at time of employment?

Charles_Austin

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Re: Perils of Church-Related Pensions
« Reply #51 on: October 31, 2010, 10:52:24 PM »
As we have often noted, linkage through common interest and programs and even "mission" is not the same as legal union. Tough. Non-theological. But true.

Scott6

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Re: Perils of Church-Related Pensions
« Reply #52 on: November 01, 2010, 06:43:25 AM »
As we have often noted, linkage through common interest and programs and even "mission" is not the same as legal union. Tough. Non-theological. But true.

Under the heading "Program Units of the Churchwide Organization" in the ELCA Constitution we find:

16.30. PUBLISHING HOUSE OF THE ELCA
16.31. This church shall have a publishing house to carry out the publishing
ministry of the Evangelical Lutheran Church in America. The Publishing
House of the Evangelical Lutheran Church in America shall
be incorporated. The president of the corporation shall serve as its
chief executive officer. Upon authorization of the Church Council,
portions of the activities of this church’s publishing house may be
conducted through separate corporations.


Among other descriptors of the publishing house "of the ELCA" (an important genitival construction, as becomes quite clear), including its name as AF, we find:

16.31.02. Constitutional provision 16.12. and bylaws 14.21.02., 14.21.03., 16.12.11.,
and 16.12.14. shall apply to this publishing house.


So what are those provisions, you might ask?

They are:

16.12. Each unit shall be responsible to the Churchwide Assembly and will
report to the Church Council in the interim. The policies, procedures,
and operation of each unit shall be reviewed by the Church Council
in order to assure conformity with the governing documents of this
church and with Churchwide Assembly actions.


So AF is, per the ELCA constitution, responsible to the Churchwide Assembly, and its policies, procedures and operation are under the authority of the Church Council (who can review them to assure conformity with the governing documents of the ELCA and CWA actions).

To make sure this is clear, we have 14.21.02:

14.21.02. The Church Council shall review the procedures and programs of the
churchwide units to assure that churchwide purposes, policies, and
objectives are being fulfilled. Each unit shall recommend policy and
develop strategies in its particular areas of responsibility after consultation
with other units of the churchwide organization and affected synods,
congregations, agencies, and institutions.
a. Policies related to the day-to-day functioning of the unit or to the
specific responsibilities of the unit that have no implications for other
units, congregations, synods, agencies, or institutions may be approved
by the unit, subject to ratification by the Church Council.
b. All other policies shall be submitted to the Church Council for
approval.


So even policies relative to the day-to-day functioning of AF are subject to the Church Council's ratification though they can be adopted provisionally, and everything else must (a "shall" rubric) be approved by the Church Council.

Moving on...

14.21.03. The Church Council shall review all recommendations from churchwide
units for consideration by the Churchwide Assembly.


So AF can make recommendations to the Church Council in order for the council to make recommendations for CWA action relative to AF.

And:

16.12.11. Each program committee, which normally shall meet two times each year,
shall function as specified in this church’s constitution, bylaws, and
continuing resolutions regarding its responsibilities in relation to a
particular unit of the churchwide organization.


AF must function according to how its responsibilities are spelled out in "this church's constitution, bylaws and continuing resolutions".  If it wasn't clear already, it is the church that calls the tune relative to AF.

All in all, it seems to me that the pensioners of AF have a pretty good case to make.  AF may be separately incorporated (as the ELCA constitution says it must be -- another linkage), but its relationship is so tied in to the ELCA in her own governing documents that they can make a strong, persuasive case for a claim against the ELCA.  In one form, such a judgment has already been made by the government in its prior decision to approve AF's exemption from participating in the federal pension plan insurance b/c it is classified a church organization.

This is leaving aside the simple injustice of the ELCA itself not voluntarily coming to the rescue of the pensioners while she continues to fund advocacy programs worldwide in an attempt to right various other injustices done by others, of course.  Odd that the one she has the most ability and responsibility to fix she ignores.
« Last Edit: November 01, 2010, 06:51:43 AM by Scott Yakimow »

Charles_Austin

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Re: Perils of Church-Related Pensions
« Reply #53 on: November 01, 2010, 07:42:08 AM »
I am not, Scott, the ELCA lawyer, or anyone else's lawyer. Neither are you. So I do not know whether your questions to this matter of our legal system are properly framed or how to answer them.
Having spent a good deal of time covering courts and issues relating to property, ownership, responsibility and accountability, I will only say that I think no one here - neither you nor I nor anyone who has not read the law and studied the attendant documents (at a rate of about $300 per hour) - has a handle on what the real issues are.
My pension was cut 9 percent this year, and faces cuts for the next two years, perhaps at the same amount. Pastors who worked for peanuts most of their ministries, did not buy a house or plan properly for retirement are suffering throughout the ELCA, much more than I. My wife has a good pension, I have some pension from my secular work and I am able to earn a few bucks when I wish to do so.
If I were to take up the banner of "justice" on any ecclesial economic matter, it would be in a battle to see that pastors are properly compensated and that our pension plan is fully funded, rather than being crippled by the unfunded liabilites we stupidly accepted at the time of the merger.
« Last Edit: November 01, 2010, 07:44:17 AM by Charles_Austin »

James Gustafson

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Re: Perils of Church-Related Pensions
« Reply #54 on: November 01, 2010, 07:48:44 AM »
...
This is leaving aside the simple injustice of the ELCA itself not voluntarily coming to the rescue of the pensioners while she continues to fund advocacy programs worldwide in an attempt to right various other injustices done by others, of course.  Odd that the one she has the most ability and responsibility to fix she ignores.

I don't think it's odd at all, its all to common actually.  They've been around for thousands of years, Jesus mentioned meeting a few, He called them hypocrites when he talked to them.

James Gustafson

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Re: Perils of Church-Related Pensions
« Reply #55 on: November 01, 2010, 07:54:38 AM »
...
If I were to take up the banner of "justice" on any ecclesial economic matter, it would be in a battle to see that pastors are properly compensated and that our pension plan is fully funded, rather than being crippled by the unfunded liabilites we stupidly accepted at the time of the merger.

And that's wrong too, I would stand and fight beside you if you did lead that battle.  The promises already made by the "management" needs to first and foremost in their accountabilities today, short of utter bankruptcy and forfeiture of assets those things need to be cut last.  New promises shouldn't be made and new endeavors should not be undertaken if they aren't held liable for past shortcomings and responsibilities.

Scott6

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Re: Perils of Church-Related Pensions
« Reply #56 on: November 01, 2010, 08:04:07 AM »
I am not, Scott, the ELCA lawyer, or anyone else's lawyer. Neither are you. So I do not know whether your questions to this matter of our legal system are properly framed or how to answer them.

True, I am no lawyer (though here I can claim to be the son of a lawyer which, in some circles, may be claiming to be the son of something I'd not want repeated here  >:( [especially as it's my dad who's the lawyer]), but I do know argumentation which is what lawyers do -- though I certainly don't know the ins and outs of the law here.  So I made an argument based on the ELCA's constitution alone as to how one can see that the ELCA is closely tied to AF in terms of: a) being responsible for its creation by legislating its existence as a separately incorporated unit; b) overseeing both its general policies as well as its day-to-day operational policies; c) having AF be responsible to the CWA; d) giving the Church Council oversight of AF; e) allowing AF to make recommendations to the CWA via a review of AF's suggestions by the Church Council; f) requiring AF to operate according to the ELCA's governing documents; and g) having it recognized as a church organization exempt from federal pension insurance.

Like I said, I'm not a lawyer, but those seem to me to be rather strong arguments connecting AF to the ELCA, and showing such a connection would be a key component in arguing that the ELCA is legally responsible for the AF pensions.

But perhaps James Gale or Donald Kirchner, who are lawyers, could comment.

If I were to take up the banner of "justice" on any ecclesial economic matter, it would be in a battle to see that pastors are properly compensated and that our pension plan is fully funded, rather than being crippled by the unfunded liabilites we stupidly accepted at the time of the merger.

I can understand why you'd want your pension plan to be fully funded.  I would further say that not doing so while funding the advocacy office in Washington to advocate for other injustices is simply another example of an injustice the ELCA could and should address.  This would be under the rubric of cleaning up the your own backyard before pointing out how bad your neighbor's is (or splinters and logs, if you like).
« Last Edit: November 01, 2010, 08:11:10 AM by Scott Yakimow »

Charles_Austin

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Re: Perils of Church-Related Pensions
« Reply #57 on: November 01, 2010, 08:18:33 AM »
Scott writes:
I can understand why you'd want your pension plan to be fully funded.  I would further say that not doing so while funding the advocacy office in Washington to advocate for other injustices is simply another example of an injustice the ELCA could and should address.  This would be under the rubric of cleaning up the your own backyard before pointing out how bad your neighbor's is (or splinters and logs, if you like).

I comment:
If I only put my resources towards alleged injustices that affect me and my family, I will be ignoring my responsibility to be concerned about the sufferings of others.
So I am glad that our national and synodical offices of governmental affairs speak up for the poor, the immigrants, the abused and others in need, some of whom may need that voice more that I need a bigger pension.

Scott6

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Re: Perils of Church-Related Pensions
« Reply #58 on: November 01, 2010, 09:05:51 AM »
Scott writes:
I can understand why you'd want your pension plan to be fully funded.  I would further say that not doing so while funding the advocacy office in Washington to advocate for other injustices is simply another example of an injustice the ELCA could and should address.  This would be under the rubric of cleaning up the your own backyard before pointing out how bad your neighbor's is (or splinters and logs, if you like).

I comment:
If I only put my resources towards alleged injustices that affect me and my family, I will be ignoring my responsibility to be concerned about the sufferings of others.
So I am glad that our national and synodical offices of governmental affairs speak up for the poor, the immigrants, the abused and others in need, some of whom may need that voice more that I need a bigger pension.

Unless you're related to all the AF pensioners, I think they qualify.

Or at least you should ask them their opinion, first, before ignoring their needs.

But in any case, the ELCA should not perpetrate injustice.  Proclaiming against the injustice of another while actually perpetrating it by being a party to it elsewhere has a quite simple name -- hypocrisy.

Charles_Austin

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Re: Perils of Church-Related Pensions
« Reply #59 on: November 01, 2010, 09:44:55 AM »
Scott writes:
But in any case, the ELCA should not perpetrate injustice.  Proclaiming against the injustice of another while actually perpetrating it by being a party to it elsewhere has a quite simple name -- hypocrisy.

I comment:
Personally, I do not know enough about the situation to declare it "unjust." That requires some assumptions about what is going on that I am not qualified to make. And, as noted above, I don't think you know enough about the situation either.

Now, if your view of justice is that all retirees or all people should somehow receive a certain level of support at a certain time in their lives, you will want to expand the work of the LC-MS offices of governmental affairs.